Continuous Improvement Builds a Best-in-Class Treasury
Congratulations to Bristol Myers Squibb on winning the 2023 Gold Alexander Hamilton Award in Technology Excellence!
“We needed to quickly adopt new processes and tools to manage the larger-scale organization,” says Sandra Ramos-Alves, senior vice president and treasurer of Bristol Myers Squibb. “To ensure that BMS has world-class capabilities aligned with treasury’s vision, the treasury leadership team embarked on a multiyear technology excellence initiative. Our goals were to ‘hyper-automate’ treasury activities in order to streamline processes, and to expand data availability and accelerate the generation of insights.”
The initiative started by identifying potential areas for improvement throughout all of treasury’s functions. The treasury leadership team undertook an exhaustive, three-month needs assessment to identify pain points and processes that were unnecessarily manual. They identified more than 20 areas that required improvement, then risk-ranked and prioritized them.
Among the issues they pinpointed: Policies and standard operating procedures (SOPs), including delegation of authority, no longer addressed the needs of the combined company. Data was often stored in siloed applications, so users had difficulty accessing it in a timely manner. Analytics capabilities were limited, at best, within the company’s systems of record, including its treasury management system. Treasury staff were expending a significant proportion of their time supporting low-level manual processes, which reduced their bandwidth to take on value-added work. In combination, these challenges rendered Bristol Myers Squibb’s treasury department more reactive than proactive and reduced its preparedness to support the combined entity into the future.
Vivek Agarwal, the company’s senior director of finance technology and transformation, and Ravi Patel, director of financial risk management, headed up the initiative designed to solve these challenges. The scope of the initiative, which the company named “Treasury Forward,” was immense. “For a while, my calendar was just packed with meetings to help move the projects along,” Patel says. “But as we completed the projects, the impact on the company’s financial risk management was profound.”
After a thorough review and extensive communication via town halls and treasury focus groups, the project team updated more than a dozen of Bristol Myers Squibb’s policies and SOPs. “We asked the team to look at every single treasury policy that existed and to analyze whether it made sense given the market dynamics at the time,” Ramos-Alves says. “They embraced that challenge and combed through everything we do, eliminating a lot of steps that were not true mitigating controls as well as cumbersome processes that were unnecessary. We streamlined a lot of workflows simply by updating policies.”
One example of the policy changes they made was increasing delegation-of-authority limits to better reflect the company’s growth. “The acquisition of Celgene doubled the size of our organization, from $20 billion to $40 billion in revenue,” Agarwal says. “Before the acquisition, we might have required CFO approval to make an investment or issue a line of credit over a certain amount. Now that the company is twice as large, the amount that requires the CFO’s attention should be higher.
“Things that can be done by the assistant treasurer should not be taking up Sandra’s time,” he continues. “So we went through every treasury policy and determined what could be approved at the treasurer level, at the vice president level, at the associate director level, etc. We kept in mind what we want our treasury processes to look like in 2030, when we expect to be even bigger. The controls we previously had in place were suitable for a smaller organization, but with the growth we experienced—and anticipate moving forward—encumbering the treasurer and CFO with a bunch of routine approvals day-to-day is just not practical.”
Another policy change that was part of the initiative was increasing the allowed instruments available to the team to hedge FX and interest rate risk. “We extended our tenors out on a rolling two-year basis, versus 15 months, and added new instruments to the portfolio,” Ramos-Alves says. “We became more innovative and took some risk off the company.”
As the team reconsidered all the company’s treasury policies, they also evaluated new ways in which technology could enhance treasury processes. As a result of that effort, Bristol Myers Squibb implemented a new FX risk management platform. “We deployed AtlasFX, which allows us to aggregate balance sheet exposure across several different entities,” Patel explains. “AtlasFX also enables us to hedge more efficiently and frequently, as is appropriate for a company with a daily rate. In addition, we made some changes to our FIS Quantum treasury system that automated tasks, and this ended up saving us quite a bit of time.”
The Treasury Forward initiative also included development of a treasury data lake, which regularly and automatically ingests information from several disparate source systems. The data lake is housed in Amazon Web Services (AWS) S3 storage and includes data from Quantum and several homegrown treasury solutions. It is the first such consolidated treasury database Bristol Myers Squibb has had.
Next, the team used Tableau to build analytics that tap the data lake. One new dashboard provides a global view of cash on hand in bank accounts, with the ability to slice and dice by legal entity, geography, counterparty, and other factors. Another tracks all signatories of the company’s bank accounts globally and supports management of year-end Foreign Bank and Financial Accounts (FBAR) certification. A third dashboard monitors the company’s insurance requirements on a global scale, providing a bird’s-eye view of status and renewals.
“We have a dashboard that tracks our bank-counterparty exposures, and we are enhancing that to include our hedging partners too,” Agarwal says. “To build all these new capabilities, we just needed to tap into the appropriate data set. We could possibly have developed the same visibility without the data lake, by directly pulling information from all the necessary systems. But we can build it much faster because all our treasury data is now centralized. This project has really accelerated our insight generation.”
The project team also leveraged tools such as Microsoft Power Automate to streamline other manual workflows, further reducing the time that staff must dedicate to routine treasury tasks. For example, each of Bristol Myers Squibb’s intercompany funds transfers requires approvals from several parties, such as tax, treasury, legal, and the finance director for the market in question. These approvals were formerly coordinated via email and tracked manually by the treasury team. Now, Power Automate routes funds-transfer requests to the appropriate people, who approve within SharePoint. The process requires far less manual work and provides a reliable source for storing and documenting required corporate documents.
The initiative encompassed a wide range of similar automation endeavors. In fact, the team worked on more than 100 projects as part of the Treasury Forward technology transformation. Together, these projects have brought dramatic improvements to the effectiveness and efficiency of Bristol Myers Squibb’s treasury function—and, by extension, the company’s business controls.
To keep treasury staff and other employees abreast of the changes, the project team held a series of lunch-and-learn training sessions. “We did not just need to teach them how to use new software,” Agarwal says. “Of course, technical education was part of the training, but we also wanted to impart a shift in mindset. For example, we wanted to make sure that whenever treasury personnel are collaborating, they do so through SharePoint and not through email so that they harness SharePoint’s collaboration capabilities.”
“Treasury Forward represented a significant change in treasury culture, so one key factor in the success of this initiative was ensuring that we were open to change and looking at the art of the possible,” Ramos-Alves adds. “We listened to all the voices around the table and embraced what everyone had to say. That was key to successfully leveraging the technologies we deployed.”
It was also key to changing the perception of treasury throughout Bristol Myers Squibb. “As a result of our change in culture, execution of several high-profile value-added activities, and increase in cross-functional partnerships, treasury now has the highest scores of any team within the finance function in BMS’s internal pulse survey, and jobs in treasury are among the most coveted in finance,” Ramos-Alves says. “I think it’s because people outside of treasury can see how we are delivering value and making an impact for the company. I am incredibly proud of that.
“The journey is far from complete,” she concludes. “The business continues to get more complex, so streamlining processes will be an ongoing effort. We will continue to reassess processes and technologies as challenges arise, and re-engineer them when we need to. The Treasury Forward initiative helped us build a continuous improvement mindset, and we are well on our journey to maintain our status as a best-in-class treasury department.”